Property tax fears fuel UK rental rise

Wednesday, February 25, 2015 - 02:09

Fears over a new property tax on homes over £2 million should Britain's Labour party win the next election, is fuelling a rental frenzy in the capital. Hayley Platt reports from a £7,000 a week pad in South Kensington.

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++NOTE TO EDITORS, THIS EDIT REPLACES 1177 WITH NAME CORRECTION++
A smart family home in the heart of London.
It would cost several million pounds to buy.
But this one's not for sale.
It's one of a select number of multi-million pound homes up for rent.
Louise Good is head of Super Prime lettings at Savills.
SOUNDBITE: Louise Good, Head of Super Prime Lettings, Savills, saying (English):
"We've got here 6 bedrooms, several reception room areas, a study for his or her use, a lovely big kitchen/breakfast room and this is priced at £7,000 a week."
And there's plenty more like this one.
London house prices are among the priciest in the world.
But with a UK election just around the corner wealthy buyers are holding off on property purchases, fearing a new, more expensive property tax could come into force if the country's Labour party wins.
SOUNDBITE: Louise Good, Head of Super Prime Lettings, Savills, saying (English):
"We certainly in our Super Prime Department have had quite a surge of people at the high end looking to rent just to see what's going to happen and that's anything from the 3 bedroom right up to the 6 bedroom houses."
Labour wants to introduce an annual Mansion tax on properties over £2 million pounds.
Currently buyers pay a one-off tax.
Anthony Payne is from property website Lonres.com
SOUNDBITE: Anthony Payne, Managing Director, Lonres.com, saying (English):
Some of the figures being spoken about are very substantial, £50,000, £100,000 or more per annum. Well, if you have to take that into account over and above your purchase price and everything else associated with owning a property it's something you've really got to think about before you commit."
Data by Lonres.com showed the number of properties in the capital let for more than £5,000 a week rose by 12 percent in 2014.
The majority are rented to well-heeled international investors, looking to occupy a slice of Britain.
SOUNDBITE: Anthony Payne, Managing Director, Lonres.com, saying (English):
"Brazilians have started to play a role and in fact a number of South Americans buyers have come in to the market but the Chinese are still very strong in the market, Middle Eastern investors are still strong in the market. It depends very much on the political situation."
The UK election is on May 7.
Potential prime homebuyers will be watching the outcome closely, before deciding whether or not to dive into London's already red hot housing market.

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